Electricals and mobile phone retailer Carphone Warehouse (CPW) saw revenues and total number of connections fall in its third quarter, according to result published today.
Its prepay market in the UK saw a 35 per cent to 40 per cent drop in the 13 weeks to December 31st 2011, meaning its total like-for-like sale declined 4.7 per cent year-on-year during the period.
A lack of available smartphones for the low-end prepay market and a reduction in subsidies from networks was blamed for the slow performance in this area, however post-pay volumes were reportedly up and with this product sector providing the bulk of profits for CPW the trader is still confident in meeting its full-year targets.
Non-cellular sales, which include tablets devices and other non-phone products, grew in double digits during the quarter but still only represent less than ten per cent of the retailer’s overall trading.
Roger Taylor, CEO of CPW, said: “CPW Europe has performed strongly on postpay sales and is now benefiting from the improved profitability of its new postpay commercial terms.
“In addition, we achieved 15 per cent growth in our non-cellular revenues, with the sale of tablets and other devices accelerating. As expected, the prepay segment remains weak, with a significant decline in low-end prepay sales year-on-year.”
The last year has seen a significant change in strategy for the company, having sold its interest in Best Buy Mobile US during the quarter, and closed all of Best Buy’s ‘Big Box’ stores in the UK, which CPW jointly ran.
Focus has now shifted towards boosting non-cellular revenues by expanding its Wireless World stores further across Europe, with more than 294 of theses formats, which offer a wider range of connected electronics, currently operating across the continent.
Taylor added: “We remain well-placed to benefit from continued consumer enthusiasm for connected technology, and as such we are accelerating the roll-out of our Wireless World stores to meet this demand and deliver a strong service proposition that complements this segment of the consumer electronics market.
“As with all retailers, we face a tough consumer backdrop, but our customers value our proposition and we are capitalising on the strong product cycle in smartphones and non-cellular categories, where we continue to broaden our range.
“With confidence in our future, we are reiterating our guidance for this year’s headline earnings.”